Bitcoin Forum

Is it a good idea to have multiple BTC wallets and keep your main stash in one that you don't spend directly from?  If so, I guess the idea is to avoid becoming a target when you send someone BTC because they can see how much BTC you have and at that point they possibly know a little bit about you?

Yes it's better to have a couple of wallets. Try using an online one like blockchain.info for a daily use wallet and have an offline one for your main stash. Send money to different addresses if you dont want people knowing how much money you have in that particular wallet.

I keep my main stash in 4 different addresses, mainly for the following reasons; (paper wallets)

- If my private key is compromised then I don't loose all my funds!
- Privacy, it's like telling someone your bank balance.

I also have a Blockchain.info account with a couple hundred or so bucks in just for everyday spending.

Better to have two wallets. One offline wallet and one online wallet. Use the online wallet to send funds to others, while keep most of your coins in the offline wallet (in USB stick.etc)

I've got 4 paper wallets in a safety deposit box. Then a small amount on coinbase I use for spending by sending to my android wallet.

It would be even better if you kept the paper wallets in different places.

The better thing that you can do for maximum privacy is to use an address for every transaction that you will make. With a deterministic wallet isn't hard to recovery the whole bunch of used/unused address

Do multiple wallets really provide any extra security or privacy though, given that someone can easily analyze the blockchain to see that one larger wallet is feeding the smaller wallet?

Simply don't reuse addresses for privacy, or mix your coins if you're really that concerned. Mixed coins are untraceable, or use Dark Wallet's DarkSend.

I'm not so concerned, I'm just trying not to be stupid.  I'm wondering if going through the effort of setting up multiple wallets or using multiple addresses is worth it.  I'm wondering if it actually provides anything at all.

I think you should by default be keeping BTC in separate wallets. Obviously you never go into this planning to be scammed or hacked. If it does happen though for whatever reason, you will not lose your entire holdings if you have it partitioned in separate wallets.

Well, if you are paranoid about all your wealth getting tracked, then you should use multiple addresses.
If not, then you don't need to at all.

I would do this:

1. Get a few online wallets from Blockchain, and then make a main offline wallet. Use the offline wallet via a encrypted and locked USB drive. (85% in my main, the rest in the others.)

2. Also invest in a few of the promising Altcoins like LiteCoin. The wealthy grow their wealth by investing, and their property. Do something similar with Altcoins. Keep them on the USB also.

3. Never let the USB out of my sight.

4. Invest in gold or silver, and miners.

Yes.

Every x BTC stored in BTC Wallet, store this file in secure way ... and then, create a new.

for me, every 10 BTC, i change the wallet ... more secure if you have a problem (like multiples account on multiples banks).

I would suggest having at least 3-4 wallets depending on how much BTC you are holding.   It should be spread across both online and offline wallets.   It can be mainly held offline if you are using BTC as a long term investment.   If you are using it as a currency, then you can obviously leave it online for convenience. 

If you use Bitcoin "properly", that is don't reuse addresses (including always sending change to a new address) it is rather difficulty potentially impossible for someone to determine how many coins you control.   That being said having a second wallet (either digital or paper) for offline storage of coins makes sense.   I think of my daily wallet as walking around money and it is a reasonable substitute for petty cash, credit cards, checking account balance, etc.   Most people don't keep their entire fiat networth available for instant access.  Warren Buffet doesn't walk around with $40 billion in walking around money.

Personally I like the simplicity of encrypted paper wallet for offline storage.  Print multiple copies and store them in safe locations.  If my house burned down today or by safety deposit box was seized I would still be confident that I wouldn't lose my offline coins.

Can I have one private key associated with multiple addresses?  Ideally I would only have to back up one private key.  Is multibit still generally the client of choice?

A "deterministic" wallet uses a single value (the seed) to generate all the private keys. If you back up the seed, you can recover all the private keys. Electrum is a example of a deterministic wallet.

https://en.bitcoin.it/wiki/Deterministic_wallet

I read something about Electrum that I didn't like.  Something about it being centralized in some way?

What do you mean it is "centralized"? It does rely on specific servers, since it does not download the entire blockchain.

Yep, that's what I mean.  From what I understand, multibit also does not download the entire blockchain and is able to function without relying on centralized servers.

Is it possible to have the best of both worlds?  Meaning security/privacy through changing addresses, backing up only one private key or seed, and not relying on somebody's servers?

That already exists... Bitcoin Core.... Multibit... They already have those features.
If you consider nodes as servers, then no, that is impossible.

You can setup your own electrum server, to avoid a connection to a centralized server

I use multibit so that's great news.  I just click the "New" button under the Request tab and I'm sending from a brand new address that is not easy to associate with my whole stash and I only have to back up the one private key?  It sounds too good to be true.

Nodes are OK.  Have to connect to the network somehow.

Oh. You meant a single private key for more than one address.
Well, that's impossible. I suppose someone could implement a seed function for Bitcoin Core, but I dunno if we desperately need that.

Is there a way to send BTC to people without making it easy for them to see my BTC balance, and also limit the number of private keys I need to back up?

Well, yes. You can do this:
1. Create 2 addresses, "1abc" and "1def".
2. Have the funds in 1abc. (lets say 1 BTC)
3. Send your coins to a mixing service, with forwarding addresses 1def and your recipient's address.
4. Next time you want to send a transaction, do the same but send to 1abc.

This isn't as good as using new addresses every time, but the coins are still untraceable, and no one will know that 1abc and 1def are both yours. You will only need to backup 2 private keys.

Everyone that doesn't use a mixing service is exposing their total balance to the recipient whenever they send BTC?

Technically yes. Change addresses can be traced, and someone can determine which addresses belong to who in that way.

that's why, when you bid BTC (in exchange) ... you must use already multiple wallet.
cut BTC after is useless.

when you received BTC from anonym source and use (don't linked) multiples BTC wallets ... no problem (balance unknown)

I'm not sure what to do.  There are a lot of posts in this thread saying that if you don't use multiple addresses, anyone you send BTC to will know how much BTC you have.  Now it sounds like if you don't use a mixing service, everyone you send to will know what you have even if you use multiple addresses.

I'm not trying to hide from anyone.  I just want to go about my merry crypto life in a smart way.  If I keep my entire balance in an encrypted wallet on my computer under a single address so I only have to back up that single private key, am I an idiot?  Everyone I send to will know my balance, but in order to steal from me, they would have to hack into my computer and install a keylogger in order to get my password for decryption, right?

No, you are not an idiot. And yes, to steal from you, they would have to hack into your wallet.
People that want to stay anonymous are either criminals or privacy-paranoid.

It sounds like everyone is going to know my balance if I don't use a mixing service and that's OK.  The important thing is that they can't take it.  What is the best way to go about storing the bulk of my BTC offline?  Paper wallets seem to be popular.  How do you transfer BTC from a paper wallet to an online wallet for spending?

You can use any wallet to import the private key, and you can spend funds from that wallet.

So you create a new private key on your computer, print it onto a piece of paper, and delete it from your computer.  Then when you want to spend those funds, you type the private key from the piece of paper into your computer?  I don't see how that offers much extra security since your private key will then be known if your computer has been compromised.  What am I missing?

realised, and because of high volatility, it's safest to open accounts on like 10 exchanges and keep coins/dollars there...

I personally find that paper wallets are a mediocre solution. They look nice and are sort of functional (except you have to import the whole balance and then broadcast from a comp connected to the net which poses a security risk) and can be encrypted (with BIP38) if done correctly. You would be far better off looking at cold storage - have Armory/Electrum on an offline air gapped computer and use it to sign txs that you make on your online computer. That way you never have your private keys exposed on an online computer. I would prefer Electrum as you can backup your seed physically and thanks to its deterministic nature you'll have all your private keys even if your hardware fails.

Aha, that's not how it works. You generate a private key on an offline computer, abd then print it out. That way keyloggers cannot send the data to the hacker.
Also, you don't have to type the whole private key in, you can just scan a QR code.

y, it is good. If you separete each receiving into one address, people will have a really hard time trying to guess how many btc do you have.

But do it right with the backup:

don't put all the key in a single device
don't make only one backup
don't have one big stack in one address that is used to transfer small funds to other address that will be used to make small payments, since it is easily backtracked


another alternative maybe is use bitcoin mixers, just dont ask me about a reliable one

That's not completely true, if your computer is already compromised, you can even cut off the internet connection, but when you will re-connect the PC, a keylogger will be able to send the infos catched in the offline session to an attacker.

So the best thing that you can do is basically use a live CD to obtain a clear environment

Sorry, I think I didn't express myself clearly, I meant a computer that will never be online at all.
But if you had that, you could simply turn it into a cold wallet, where you sign transactions on there and then broadcast it using an online computer.

Yep, definetly better especially for managing multiple address (electrum can do perfectly the job, and the deterministic feature avoid a lot of harassment)

This sounds like the only really secure option.

Would I only need to backup the seed?  If someone were able to read that seed backup, would they be able to spend the coins?

If the offline computer were physically stolen, would the thief be able to spend the coins?

How about installing Linux on a USB stick and booting to that with networking disabled instead of using a separate offline computer?

I suppose this sort of thing is only available for BTC so altcoins have to remain vulnerable.

Yes, only the seed. And yes, if someone gets the seed, they can spend your coins.
Well of course. All they need is to connect the computer to the internet.
Mhmm... Maybe. As far as I know, some keyloggers can log everything, no matter what VM/USB OS you put on it.

But seriously, a paper wallet is more than enough. You are a bit too paranoid.

I use 3 wallet
The first with something like 200$ on blockchain wallet
The second on Elecrum with 30 % of my bitcoins
Then I have a paper wallet with other bitcoins

Can't I encrypt or add a password to the Electrum wallet to prevent that?



A physically-installed hardware keylogger would function on a USB boot but a software keylogger wouldn't work.  Does anyone run a cold wallet this way?



From a practical perspective, I don't see how a paper wallet provides any more security than a wallet on your computer.  In order to move the coins from your paper wallet, you have to import the private key to your online computer and if your computer is compromised, you lose control of the coins just like the wallet was on your computer all along.

Of course! My advice is to use only encrypted backups, w/o a "raw" seed backup.

in clear, buy a PC for Bitcoin.
not a big deal (with low price netbook).
you can use a android phone, too ... just for Bitcoin (only this installed, wifi ... no SIM card).

compromise PC is always because of multiple usage and multiples users ...

A PC is definetly a better choice for managing a cold storage. With an android phone, afaik, you can't sign offline transaction, so now there isn't a very secure and reliable way to administrate an offline wallet.

I agree with the above, and this is actually what I do as well.   I keep a separate PC, that I do not browse the internet with, and definitely don't download anything on it.

Still isn't enough, it needs to be 100% offline. It could still be hacked and have keyloggers implanted in its registry.

I agree, for a true security an offline PC is the best thing that you can do.

Paper wallet is a means of storage it isn't incompatible with using an offline client for signing.  Someone however could buy $1,000 worth of BTC and in a fairly easy, fast. and straightfoward manner secure them offline via a paper wallet.  If they are a buy and hold kind of investor that may be all they need for ... now.   If Bitcoin goes nowhere well it didn't take much to get started but say Bitcoin over 5 years does explode and there $1,000 in now worth a couple hundred thousand.  Pretty easy to buy a netbook or some other device to act as an offline signing device and import the private key directly on to that device.

I think a separate PC with Electrum as bitcoin cold wallet and no alts is adequate security for most people. Just keep small amounts on online wallet and exchange.

What's wrong with booting a USB stick?  Is it just the possibility of a hardware keylogger?

Your USB stick could be infected with malware and keyloggers, and the computer you plug it in too, so there's no difference.

If you build the USB stick the same way you would build a computer, why would the USB stick be more dangerous?

Because it can pass malware onto any computer it gets plugged in to.

multiple wallets will be an issue

It won't. Please stop making statements without backing them up with an explanation, you are misleading people.

yes ... and skynet exist.  ::)
after a moment, stop to spread some legend about multiple infection.

if you pass he USB key on main computer that it have (real) antivirus (and correctly configure) ... it scan the USB stick always and clean all files.

malware and spyware only transist with inject java corrupted code on this plant in 2014.

but, other solution is to desactivate the "auto-lauch" ... in every windows to remove an automated script on the key (good luck, only apparear 1 time in 7 years on pictures and word documents massivly infected).

In order to install Linux on a separate offline computer, I would need to set up the install on a USB stick anyway.  Doesn't anyone run cold storage on a bootable USB stick?

Started out on page 1 being relieved. By page 4, I'm terrified, paranoid, hopeless and confused. Thanks :D

What is your suggestion on using an external backup drive to put the wallets and btc info on and keep it off the computer...and then when it's needed, plug it in and use it however? If I use the offline wallet (not paper) but the software that sits on an external drive or usb stick, I know I'm supposed to turn off the net connection when using it.

But what's the procedure to say, take some btc out of the offline wallet to send to the web based wallet for spending/use or transferring back and forth? Do I connect only long enough to send funds to the web wallet (presumably a completely new/different one and not an old one?) and disconnect the computer, remove the drive and then reconnect as the norm otherwise?

Yall seriously can make someone scared to death to even get online anymore  ;D


Also for the point about people seeing how much btc you have or following the whole transaction, unless someone is specifically tracking a specific transaction to a person, I'd think it really doesn't matter if anyone sees amounts of btc. They don't know *you* have it, just that somebody does. That's part of the whole transparency thing...so even if a hacker sees a lot of btc in the chain, they still have a ton of work to do to find a way to get it, right?

The idea here is that any operating system installation that has ever been online is potentially compromised.  So you want to sign your transactions with an install that has never been online.  I think a carefully installed USB stick would work nicely for that if you actually boot to it in order to sign the transaction and you don't connect it to an install that has ever been online.

Yes ,It's security

Its not a legend, and you should know that commercial antiviruses don't deect the majority of malware and crap.


Running linux from a USB is Ok, but make sure that the computer was never online. I thought you meant installing something like Electrum on a Usb and using it when you need to.


This statement makes no sense whatsoever.

Also, as before was mentioned, beware of windows autostart, is one of the most dangerous feature for an "always offline PC"

Yes for sure use many different wallets so in the unlikely event that one gets taken over or lost you still have the majority of your funds.

Do you mean make sure the operating system on the USB stick was never online?  If so, I agree.  It's OK that the host computer was online as long as you actually boot into the USB stick to use it.

No, that's not what I meant. The computer must be offline at all times, no matter what OS. It's not OK that the host computer was online, since, as I said before, there are cross-OS keyloggers too.

As long as the USB stick is not plugged into the computer when its main OS is booted, it is safe to go online with that main OS.  When the USB stick is booted, the computer's main OS will not affect it unless you mount the device containing the main OS while the USB stick is booted.

Wrong. Viruses can be embedded in the BIOS, and will be activated when you turn on your computer.

I've heard of that but I think it's exceedingly rare.  Are there any confirmed reports of that happening?

This is a rare type of attack that i think can be stopped only with an ever offline PC

That's why I'm saying that the PC should be completely 100% offline.
You have no guarantee that these types of viruses won't be common in the future, and it's better safe than sorry.

I think he means that the blockchain itself (that is scanned) is centralized. But this is very different from being a centralized service, in that you can always take the private keys to your own client and scan the blockchain on your own. Electrum just speeds it up.

And you can also setup your own electrum server/node for maximum privacy/reliability

This has been a great conversation.  Thanks dudes.

This is not that hard to implement.

Buy a cheapie old laptop on craigslist (just make sure it has a USB port),
and delete the wifi/ethernet driver(s). 

Or just pull the BIOS battery out and short it (I think is what you do?). The same way you reset the password. That would clear out a virus.

Or moar drastically: disassemble the notebook and phisically remove all the network interfaces (eth port, wifi mini-pciex, bluetooth, ecc..)

but that would be harder to implement.  drastic measures, like you said. lol.

Not really needed. As the other guy said, just uninstall drivers, so you can't connect to the internet.
Just make sure it is offline before you turn it into a cold storage wallet.

How can you make offline wallet?
and no one can access it from the net?
even me?

Easy,

Download the wallet softwAre, save on USB thumb drive, transfer it to offline computer and run it.

To use it in a read-only mode, you only need the address (that can stay offline for maximum security)
If you want to spend coins inside it, you can use some super secure tools like electrum that allow you to sign transactions offline, so you basically never expose your private key to the net.

I am using Coinbase as my primary Bitcoin wallet. I want to transfer my coins to a offline wallet. But I am afraid that I'll somehow mess up with the backup and lose the coins for ever.  >:(

This is not a bad idea! Even coinbase, one of the biggest bitcoin companies distributes the coins you put into it's wallets no matter if you only use one address or not.

You can first try with small amounts, my advice is to use electrum, cause when you have backupped the seed you simply have backupped all your present and future addresses, without hassles or headaches

To be really safe, have a 1) Savings wallet 2) Spending wallet and 3) Honeypot wallet in case you become compromised.

To be really safe, I recommend multiple wallets for each of these purposes. So if possible, have:

3 different savings wallets (all offline)
3 different spending wallets
3 different honeypot wallets.

Maybe 3 spending wallets are a little useless imho

I find this logic troublesome. So you encrypt the back-up: where to you keep the encryption key?

Do you have a back-up of the encryption key? Encryption can be useful if you make two separate trips for your off-site storage: one for the encrypted data, and one for the key.

Essentially, the Bitcoin private keys are already private keys that you have to figure out how to preserve and secure.

this is an amazing software you can use to hide things:

http://embeddedsw.net/OpenPuff_Steganography_Home.html

You could remember it, but if you are scared that you might get hit in the head, you can write down the password and put it in another place, not with your paper wallet.
And now comes the next question: If you do get amnesia and forget, how can you remember where you put the password and the paper wallet?
Lulz.

But mainly: how can you remember that you was using bitcoin and you had some?

Hmm... I guess you can make Bitcoin a "language", since people don't forget languages after forgetting everything else. Maybe that would work.

You can leave yourself a note.

I did suffer a head injury in early 2011. Don't think I really forgot much  (I may still be recovering).

Your brain is fragile. worse, it does not reliably store information. Every time you remember something, you change the memory (I heard MLC flash memory has the same problem). If you want to have your keys in more than one place, you *have* to write them down.

You could create your own puzzle based on things only you'd understand. Have 4 pieces of paper that each have a different part of the password. The first one has a clue for the second, second for the third and third for the fourth. This would allow you to protect yourself, while at the same time keeping others from knowing what's going on.

It's good to have a few wallets, but having too many can be confusing and difficult to keep track of.

A deterministic offline wallet can be enough for the majority of your funds (addresses already backed up by the seed)

I have in 7 wallets that I can think of off the top of my head and multiple more that I use sometimes. I think its safer especially if there online wallets like mine. You may have more of a chance of loosing some coins but you won't lose all your coins if something happens.